Big name clients leaving ChuoAoyama May 16, 2006Posted by fukumimi in Japan, law.
Japan Post has announced it is showing ChuoAoyama the door, and will choose a new auditor by August.
Toray and Toyo Suisan also announced they were terminating their relationships with ChuoAoyama yesterday.
Shiseido and NYK Line have also announced that they will be switching to other auditors.
ChuoAoyama has approx 2300 clients who are affected by the FSA action against ChuoAoyama. These clients are required to contract with another auditor at least temporarily (for the duration of the period during which ChuoAoyama will not be able to practice) as their contracts with ChuoAoyama will be voided for the duration of the sanction, and it remains to be seen how many of these firms will return to ChuoAoyama when the sanction is lifted.
Note: Other big name clients include Sony, Toyota, Nippon Steel, Millea Holdings, NipponKoa Insurance.
Update: We were discussing this in the office today, and one a couple of colleagues who are in regular contact with the accounting firms attest that the other "Big 4" accounting firms are being flooded with requests from companies who want to switch. At least one of the firms has set up an organisation to handle the task of turning potential clients away. Especially "potential clients" who are at the smaller end of the fee scale.
Given the timing of the announcements by the likes of Japan Post and Shiseido, most of them big bureaucratic organisations with the decision making speed of sloths (and who would neet to convene a board meeting with a majority of members of the board in attendance and negotiate and get an agreement with auditors who are willing to make the switch), one would suspect that at least a select group of ChuoAoyama clients were aware of the severity of the sanction being considered by the FSA. The question is was it the FSA leaking the info to these companies, or was it the FSA giving ChuoAoyama foreknowledge of the sanction so that ChuoAoyama could go to its "more important" clients and give them a head start before the mad rush…..
Note: To those people who are reading this entry from within ChuoAoyama or other PwC offices (yes I can see where traffic is coming from), please don't take the fact that I chose to blog about this topic personally 😉